Dow Jones Industrial Average (DJIA) futures fell in early trading Tuesday, pointing to another miserable day on the stock market. Traders appear increasingly nervous about Elizabeth Warren’s momentum as she emerges as the Democratic front-runner going into the 2020 presidential election.
One investor joked that “they won’t open the stock market if Elizabeth Warren is the next president.” Well, the prospect grows increasingly likely. Warren now leads Joe Biden in three separate polls and she’s top of the prediction markets by a strong measure.
Warren’s aggressive anti-Wall Street policies (such as breaking up tech giants and raising corporate taxes) has investors running scared.
As CCN.com previously reported, investors see Warren’s policies as bearish for the US stock market. But there’s another issue at play. According to one analyst, Warren could prolong the US-China trade war.
“The Chinese, they would like to wait out President Trump … they may be miscalculating because if they get a President Elizabeth Warren, she’s probably going to be even tougher than Trump” – Wayne Kaufman, chief market analyst at Phoenix Financial Services.
In his view, Xi Jinping would be better off making a speedy deal with Donald Trump than delay in hopes of a Democratic White House. Kaufman thinks Warren will come down harder on China for one simple reason:
“Warren will go after them in a worse way because of climate change. She’s a big, big climate change person. China is the biggest polluter in the world so the Chinese may want to deal with Mr. Trump.”
As the Democratic campaign weighs on investors’ minds, the next big catalyst is Trump’s trade summit with China. A delegation lead by Chinese Vice President Liu He will touch down in Washington DC on Thursday for the latest round of negotiations.
Early signs point to more deadlock as China refuses to back down on two key issues. Liu He said the country is unwilling to move on industrial policy or government subsidies. Seemingly in retaliation, the US blacklisted eight Chinese technology firms, throwing more uncertainty into the mix.
Last modified: September 23, 2020 1:06 PM